The rules of discovery

The necessity to consider

When an assessment is made outside of an enquiry window, it is necessary to consider if there has been a discovery. TMA 1970 s 29 provides the ability for HMRC to raise an assessment where loss of income tax or capital gains tax is discovered. FA 2010 Paragraph 25 includes discovery provisions for corporation tax and IHTA 1984 s 240 contains similar provisions for inheritance tax.

For income tax, CGT and corporation tax: the legislation was overhauled during the introduction of self-assessment with the aim of providing a taxpayer with finality where adequate disclosure is made.

Two important questions

To determine whether there has been a discovery requires the consideration of two questions:

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About the author

Anton Lane

Anton is a Chartered Tax Adviser and a CEDR accredited mediator, qualified to deal with complex dispute resolution. He has formerly worked in the Tax Risk Management team at Ernst and Young and has managed group interactions between large multinationals and HMRC. He established Edge Tax in 2005.